Formation of DWID – Buyout PWCo & SWCo Revenue, Financing and Operational Cost Projections

1. All cost projections are based on PWCo & SWCo Annual Reports with revisions to exclude miscellaneous costs not associated with a DWID. 5 Year projections were based on a conservative approach to add 89 million gallons of water to the system, upgrade infrastructure and add a new deep well within the projection period. Although the plan is conservative, it will allow our communities to finally move forward and find our own solutions. Debt repayment projections on the financing include all fees necessary to negotiate a buyout and structure the community owned water district. Financial capacity indicators are all within the range expected to achieve a successful plan. See slide 4 for an explanation of each indicator used. Reserve balances have been set and utilized to capture earned interest income in a manner which will best serve our communities over the 5 year projections. Formation of DWID – Buyout PWCo & SWCoRevenue, Financing and Operational Cost Projections • Many options are available for our communities and with the input from the citizens of Pine & Strawberry we can look at what makes the most sense. Several possibilities could range from raising water usage rates for users over 5000 gallons per month (Average usage between Pine & Strawberry is about 2500), to substantial impact fees for new meters, etc... The community (Pine/Strawberry) will need to determine how aggressive they want to be in updating, upgrading, adding storage, hooking wells to the main distribution, etc... • The water-rate financial model being used in these projections is very flexible and allows for many “what-if” scenarios. Please feel free to send questions.